Majority of the capex increase appears to be in the marketing segment which management attributed to new LPG bottling plants, lube blending plants and product pipelines.

While some miss against planned timelines are likely, the new capex plans imply priority to reinvestment over balance sheet improvement.

The management significantly raised its core capex guidance for the next five years. Total capex over FY17-21 was guided at `558 billion which includes `24 billion towards JVs, implying standalone capex of `534 billion.

This compares with its earlier standalone capex guidance of `310 billion over FY16-20 and another `140 billion on account of JVs where its equity contribution would have been significantly lower.

Investment in marketing business in particular was raised from `90 billion earlier to 260 billion — management attributed this to new LPG bottling plants, lube blending plants and product pipeline projects. Capex for Vizag refinery expansion was also raised from `170 billion earlier to `210 billion.

We also note that these capex estimates do not include a few other projects such as 60MMTPA Mumbai refinery (through JV between HPCL/BPCL/IOCL), Rajasthan refinery and upstream acquisitions, all of which are under consideration of the management.